Lan, who goes to trial next week on charges of bribery, violating bank regulations and embezzlement, said she had received an offer from the deputy governor of the State Bank of Vietnam, Tran Minh Tuan, to oversee the merger of struggling lenders Vietnam Tin Nghia Bank, De Nhat Bank and Saigon Commercial Bank (SCB).
She had not owned stakes in any of them, but had assets that could be loaned to SCB, as the merged entity was called, as collateral to borrow money from the central bank, she told the police.
Lan came on board a consultant for the merger. She bought shares in the three banks from shareholders and allowed SCB to use her five-star Windsor hotel as collateral to borrow VND15 trillion ($608.52 million) from the SBV.
She said she had made great effort to revive SCB, which still had many debts at the time still had. She wanted to “fulfill her promise to the SBV.”
She said she never placed relatives in managing positions at the bank and had not wanted any for herself either since she had no training in banking.
The decisions at SCB were made by its executives, and she was never directly involved, she claimed.
Manipulation and control
The police said however that there was enough evidence to conclude that Lan wanted to merge the three banks into a financial instrument to fund her company and its subsidiaries.
From 2011 she began acquiring shares in the three banks in other people’s names. When the new bank was established on Jan. 1, 2012, she owned 5% in it on paper while in reality she owned over 91.5%.
She had used her own money and borrowed from friends to buy the shares since she also thought their value would jump multiple times in the next five years and she could make a killing.
She had complete control over all the companies under Van Thinh Phat.
She appointed trusted people with financial experience to key positions at SCB and paid them VND200-500 million a month plus bonuses.
She instructed Van Thinh Phat executives to establish shell companies to borrow money from SCB. Those in whose names the loans were given include husband Erik Chu Nap Kee and niece Truong Hue Van.
Lan also pumped up the value of collateral by dozens of times or used illegitimate assets as collateral to get large sums from the bank.
Most of Lan’s and Van Thinh Phat’s loans were disbursed even before they were approved on paper. Some were not even approved by authorized personnel at SCB.
As of 2022 Lan and her accomplices had nearly 1,300 loans worth VND677 trillion, but they are not collectable, according to the police.
The bank’s CEO, Vo Tan Hoang Van, told the police that Lan made all the decisions at SCB and was directly involved in the approval of loans.
Swept under the rug
Lan’s activities were indeed discovered during her 10-year spree, but she paid bribes to cover them up.
In 2017 and 2018 SBV auditors concluded there were violations related to lending, handling bad debts and management, and recommended putting it under special control.
Lan promptly instructed the bank’s then chairman Dinh Van Thanh and CEO Van to bribe all 24 members of the audit team.
The head of the investigation team, Do Thi Nhan, allegedly received $5.2 million.
In response to accusations she manipulated the bank, she claimed she only decided what assets would be used as collateral for Van Thinh Phat’s loans, while approval of loans was made by SCB leaders and she did not participate in the process.
She said the case should be thoroughly reviewed, and is willing to use her personal assets to cover the bank’s losses.
Apart from Lan, there will be 85 others in court next week, including 45 former SCB executives, 15 SBV officials, three Government inspectors, and one former official from the State Audit Office.
They face charges of embezzlement, bribery, abusing their authority while performing official duties, lack of responsibility causing serious consequences, and violating banking regulations.
As for the violations at Van Thinh Phat, 108 people have been charged with several crimes, including 23 heads of departments and inspectors.
Lan and 21 others are also accused of fraudulent appropriation of assets and money laundering, but prosecutors have recommended that a separate case be brought against them.
